Google eBay Collision after eBay Live! Both, Google and eBay the two most successful business models (Search and Auctions) on the Internet, created brand new business models leading to high cash flows (Google, eBay), a very strong market share in their respective core markets, Google US with 49.7% search queries (comScore) in April 2007 within the search category and 120.010.000 unique visits overall in May 2007 (comScore) and eBay US with 94% visits (Hitwise) within the Auctions category in May 2007 and 79,428.000 unique visits in May 2007 (comScore) with an excellent brand awareness in their respective field and overall Google is the No. 1 brand worldwide and eBay No. 43 worldwide according to the 2007 BRANDZ Top 100 Most Powerful Brands report.

It's nearly a year ago (June 2006) that Google Checkout launched in the US, recently Google Payment Ltd. became authorized for e-money, launched in the UK and I'm expecting Google to launch in further European countries including Germany with the option to differentiate itself incorporating more payment methods respecting the local payments preferences. A clear collision course of Google and eBay.

• Google's Integrated Checkout Strategy

Market	Google	eBay
Classifieds	Google Base	Craigslist, Kijiji
Product search	Google Product Search, Google Base	Shopping.com, eBay
Payments	Google Checkout	PayPal
Communications	Gmail/Talk	Skype

'According to Hitwise data, last week (week ending 2/3/07) the market share of visits to eBay was 844 times greater than the share of visits to Google Base.'

'Paypal's market share exceeded Google Checkout's by 71 to 1 in the same period.' (LeeAnn Prescott/Hitwise Feb 2007)

On the one hand Google and eBay have a business relation, Google drives traffic to eBay and eBay buys Google's AdWords, on the other hand expanding into new markets led to an increasing overlap in products, customers, and business models today. When Google last week announced it would hold a Checkout party that coincided with the beginning of eBay Live!, eBay announced that they would take away all their US ad spendings.

I'm not sure whether this was a good idea, although eBay partnered with Yahoo! promoting PayPal. Google is the absolute leader in search and both Yahoo! and Microsoft admitted some weeks ago, that they lost the battle against Google. I'm expecting that Google will gain further market share in the search category, I think eBay depends on the traffic from Google, but Google does not depend on the traffic from eBay - and it's a global marketplace, not just the US. Google redesigned its product search experience - Rebranding into Google Product Search - just add a few more products...

The Economist titled it's Google Checkout - PayPal comparison 'A battle at the checkout': Here some quotes:

'Checkout has already signed up a quarter of the top 500 online retailers'

'Google is prepared to run Checkout at break-even, or even at a loss'

'A survey in January found that only 18% of Checkout users rated their experience as good or very good, compared with 44% for PayPal.'

'“The way we think about Checkout is not as a standalone business, but as a driver of the Google network,” says Ben Ling, Checkout's boss.'

Google's market entry strategy always starts like that, but as they a gain better understanding of the markets they act more savvy.

Digital business is quickly becoming the method of choice for any enterprise to offer products and services on-demand to their market. Competition is the natural evolution in the way we will interact with, share and purchase products and services within the fastest moving market in the world today.

• Current and Future eCommerce Challenges

Communications, content, commerce and search are the challenging activities today, simplicity is the most compelling competitive advantage and different business models associated with them lead to a natural segmentation of the marketplace.

Labels: checkout, ecommerce, google, markets

  ¶ 'Google eBay Collision after eBay Live!' posted by eA : 8:12 PM